Always want to verify All numbers provided by sellers.54%CoC and a 14 cap rate sounds too good to be true, don't you think? Thing with students is most move home for the summer so you can't expect or rely on 12 month leases.

First of all I don't understand the way they're presenting the math here. Secondly, I'm not convinced these #'s are accurate. Here's the way I would run preliminary #'s at this:

Gross rents (3680 x 12=) 44,160. Less vacancy (say 10%? I have no idea in your area, so purely hypothetical) 4,416 = $39,744 Gross operating income. If we apply the 50% rule (ie: total expenses will be 50% of income, and this can be conservative depending on property condition) then expenses are more likely to be $19,872 than the (+/-) $11,000 indicated. (This usually accrues to not factoring in management and/or Capital expenses) Leaving an NOI of $19,900

So, $19,900 in NOI, less debt service (provided #'s given are correct) of $10,400=

$9,500 in net income. 9,500/49,000 cash to purchase (don't know why security deposits are included here, they have nothing to do with the purchase) = 19% Cash on cash return. Pretty good number, if its true, But nowhere near the 54% number provided (faulty math). At this point, If I chose to continue, I would begin to verify everything as much as possible, some things aren't adding up (besides the math). For instance, this is student rental, 100% occupied? who rents it in the summers? It also occurs to me that a student rental might need more intensive management, ie: higher costs than the 50% rule.

Clarification, in my area, the students pay year round. this was started years and years and years and years ago. If you want that location you start to pay June 1st to secure the location. You have the option of spending the summer there. Some do, many live in different parts of the state, county. But the option is still there to live starting June 1st. So thopse numbers are based on 12 months.